When you sign for a loan, your lender should offer you the option of signing up for payment protection insurance, or PPI. These insurance policies are put in place to protect loan holders from unexpected circumstances that prohibit them from being able to fulfill the terms of their loan contract, such as disability or unemployment. Some unscrupulous lenders have sold PPI policies to borrowers that do not provide the stated coverage.

If you believe that you were sold a PPI policy that is invalid or was misrepresented, follow these steps to file a claim:

Make Sure You Have PPI

The first step to take is to make sure that you do, in fact, have a PPI policy built into your loan. Get out your loan documents and scour them thoroughly. Your policy may not be labeled as payment protection, so look for anything that discusses loan protection, credit protection, ASU or loan repayment insurance, payment cover or account cover; any of these terms are all alternatives for payment protection insurance.

Figure Out if Your Policy was Mis-Sold

If your PPI was sold under false pretenses, you were pressured into signing up for PPI or you weren’t told that it was optional, your PPI was mis-sold. Additionally, if you were given the impression that PPI would increase your chance of loan approval, the protection was added to your loan without your knowledge, you weren’t aware that you would have to pay interest on your policy, or exclusions significant to your coverage weren’t explained, your PPI is considered to have been mis-sold.

File a Complaint with Your Lender

Once you’ve made the determination that your PPI was mis-sold, you should contact your lender. Once you’ve advised your lender that the PPI was mis-sold, they have eight weeks to respond to your complaint. In your correspondence, make sure that you explicitly state why you believe your policy was mis-sold and attach proof that supports your claim. Don’t make the mistake of sending your complaint to the insurance company that holds your policy; your complaint needs to be filed with the lender.

Make Your Own Claim

It’s not necessary to use any type of firm or solicitor to file your claim for a mis-sold PPI; it’s quite easy to do on your own. Keep in mind that if you do use a professional, they’ll be entitled to a portion of your refund. You can find free PPI claim forms online and, if your claim is approved, you will keep 100 percent of the monies that you are refunded.

Hire an Ombudsman

If you file a complaint and don’t receive a response from your lender within the allotted time period, an ombudsman service can act as a mediator between you and your lender. You can also use an ombudsman if your lender rejects your claim and you think that they did so unfairly. If you choose to use an ombudsman, you must contact them within six months of receiving the final decision from your lender regarding your claim.

If you believe that you were sold PPI under misleading pretenses, filing a complaint with your lender can put your money back in your pocket. By following the five steps above, you can be sure that you will receive a refund of your money if you were mis-sold PPI by your lending institution.

Susan Litz is a guest writer for ppiclaims.uk.com where you can find information on mortgages, interest rates and special financing savings.